Apple Inc. v. Samsung Electronics Co., Ltd.

In a unique appeal in which smartphone heavyweight opponents Apple and Samsung both advocated that the district court abused its discretion in refusing to seal certain confidential exhibits from both parties, the U.S. Court of Appeals for the Federal Circuit reversed and remanded a lower court’s order denying Samsung and Apple’s requests to seal various confidential exhibits attached to pre- and post-trial motions, finding that the lower court abused its discretion under its own compelling reason standard. Apple Inc. v. Samsung Electronics Co., Ltd, Case Nos. 12-1600, -1606 and 13-1146 (Fed. Cir. Aug. 23, 2013) (Prost, J.)

Apple sued Samsung asserting patent and trade dress infringement against Samsung’s smartphones and tablets. Samsung filed its own patent counterclaims, and the case was tried before a jury that returned a verdict in Apple’s favor for more than a billion dollars in damages. The trial drew significant attention from the public and the media, leading the district court to rule that “the whole trial is going to be open.” Therefore, despite each party’s non-opposition to the other’s administrative motions to seal confidential exhibits both pre- and post-trial, the district court took a stringent approach to granting these requests. The district court denied-in-part the parties’ motions, refusing to seal confidential documents that disclosed the parties’ product-specific information, profit margins, unit sales, revenues and costs, as well as Apple’s own proprietary market research reports and customer surveys. The parties subsequently appealed the district court’s orders.

While Apple and Samsung sought the same appellate relief on this issue, they were opposed by two media interest groups—the First Amendment Coalition and the Reporters Committee for Freedom of the Press—that were granted leave to file amicus curiae briefs. The media groups supported the district court’s decision, arguing that “major media outlets were closely following ‘the case’s strategy impact on the companies, including the financial risk for shareholders.’” The Federal Circuit disagreed, however, counterbalancing litigants’ confidentiality concerns for sensitive information, such as product-specific financial information and other types of documents the district court refused to seal. The Federal Circuit reasoned that even under the district court’s “compelling reason” standard for justifying sealing the documents, the district court erred, given the confidential and sensitive nature of the information.

Practice Note: The precedential decision provides a guide for litigants dealing with sealing confidential exhibits in motion practice or preparation for trial. With the Federal Circuit’s finding of an abuse of discretion, despite strong public and media interest, district courts may be more reluctant to deny such administrative motions and err on the side of caution in preserving the confidentiality of party information.